PSALM tries to collect ₱11.5-B debts of Mindanao coops

By Myrna M. Velasco – December 12, 2019, 10:00 PM
from Manila Bulletin

State-run Power Sector Assets and Liabilities Management Corporation (PSALM), in coordination with the Department of Energy (DOE), is sorting out a strategy to collect ₱11.5 billion worth of debts from wobbly-functioning electric cooperatives in Mindanao, primarily the Lanao del Sur Electric Cooperative (LASURECO) and the Maguindanao Electric Cooperative, Inc. (MAGELCO).

The level of LASURECO’s indebtedness to PSALM has been at roughly P10 billion; while MAGELCO owes the government-owned firm some ₱1.5 billion.

“It’s the DOE that will decide what we’ll do with LASURECO and MAGELCO. We cannot simply cut the power, because we’re trying to help also the Mindanao stakeholders in rebuilding Marawi,” PSALM President Irene Joy Garcia said.
She indicated that there was a recent inter-agency meeting to sort out the debt settlement of the two electric cooperatives, “and we looked at all the possibilities, what can we do – how can we take over and how can we collect and improve the efficiency of collections.”

In the case of MAGELCO, the PSALM chief executive emphasized that it has been remitting partial payments, “as opposed to an arrangement before, that they’re not really making any payment.”

For LASURECO, Garcia said there were lost documents during the 2017 Marawi siege that are now posing hurdles upon PSALM’s bid to collect its more than ₱10 billion worth of arrears.

“LASURECO is a very complicated problem because you know what happened to Marawi… a lot of their records were stolen during the Marawi siege so they need to reconstitute the records,” she stressed.

Garcia added the tangled financial obligations of LASURECO are not considered “bad debts” yet – and these are still up for collection by PSALM.

The LASURECO debts had been part of the receivables that PSALM Board Chairman and Finance Secretary Carlos Dominguez III had mandated to be collected by the state-run firm so it can pare the massive liabilities transferred to it following the privatization of the National Power Corporation (NPC) assets.

“Secretary Dominguez has asked PSALM to exert earnest efforts to really collect,” the chief executive of the government-run firm has emphasized.

Corresponding to the LASURECO debts, there had been a proposal by the National Electrification Administration (NEA) to have its P10 billion worth of debts be written off through an Executive Order (EO) that shall be issued by President Rodrigo Duterte. That proposition, however, had not moved since last year.

Following debt condonation that shall be coming with an imprimatur from the Office of the President, NEA Administrator Edgardo Masongsong previously indicated that the next step shall be a legislative action affirming the debt write-off.

Beyond the propounded liabilities’ condonation though, Masongsong asserted that the more comprehensive plan is placing the electric cooperative under government receivership.

It was noted however that the preferred legal fiat is an Executive Order, because this is part of the grander-scale rehabilitation blueprint cast for the ‘armed conflict-wrecked’ Marawi City.